Before the Court are two more in the seemingly endless 1

conga line of discovery-related motions in this matter. Since

this action was commenced on October 13, 2005, the parties have

filed no fewer than 78 discovery-related motions, many including

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF PENNSYLVANIA

STATE FARM MUTUAL AUTOMOBILE : CIVIL ACTION

INSURANCE CO. et al., : NO. 05-5368

 :

Plaintiffs, :

:

v. :

:

:

ARNOLD LINCOW, D.O. et al., :

:

Defendants. :

M E M O R A N D U M

EDUARDO C. ROBRENO, J. MARCH 10, 2008

Plaintiffs State Farm Mutual Automobile Insurance Co.

and State Farm Fire and Casualty Insurance Co. (“State Farm”)

brought RICO and fraud actions against certain health-care

providers who were allegedly involved in a scheme to defraud

Plaintiffs by billing them for medical services that were either

never provided or provided improperly. Defendant health-care

providers filed a counterclaim against State Farm for payment of

allegedly overdue benefits.

Following a hearing on all pending discovery motions on

February 4, 2008, the Court adjudicated all motions but two. 

This memorandum address those two motions (doc. nos. 336, 362).1

Case 2:05-cv-05368-ER Document 397 Filed 03/10/08 Page 1 of 17
multiple subparts, and submitted numerous letters to the Court

concerning discovery disputes. In turn, the Court has held 11

hearings solely to adjudicate those multitudinous discovery

motions--yet the parties are still engaged in fact discovery,

well over two years after the commencement of the case.

-2-

I. MOTION FOR RECONSIDERATION: COUNTERCLAIM MEDICAL CHARTS

A. Background

Defendants filed a counterclaim against State Farm

seeking payment of allegedly overdue benefits. At a November 29,

2006 hearing on discovery motions, after State Farm complained

that Defendants were increasing the number of patients that were

the subject of the counterclaim, the Court limited the number to

244 patients: “There could be less, but there could be no more. 

He can’t show up at trial with 1,000 patients. He has [244]

patients.” Tr., Nov. 29, 2006, at 28:5-8.

State Farm subsequently moved to compel production of

complete medical charts for the 244 patients that were the

subject of the counterclaim. The Court granted the motion:

“Defendants shall provide Plaintiffs the medical charts for each

of the 244 patients for which Defendants are seeking payment in

their counterclaim.” Order, Nov. 29, 2006, ¶ 6.

Defendants produced medical charts, but, contrary to

the Court’s order, only for 196 patients, not 244. State Farm

filed another motion to compel, and the Court ordered production

of the remaining 48 medical charts: “Defendants shall produce the

Case 2:05-cv-05368-ER Document 397 Filed 03/10/08 Page 2 of 17
-3-

balance of the medical charts within 14 days.” Order, June 19,

2007, at 1 (doc. no. 287).

Beginning on June 29, 2007, the parties filed several

stipulations indicating that Defendants were withdrawing the

counterclaim as to certain patients. See Stip., June 29, 2007

(doc. no. 302); Stip., July 27, 2007 (doc. no. 312); Stip., Aug.

8, 2007 (doc. no. 314). After the stipulated withdrawals, only

161 patients remained as part of the counterclaim. Despite the

partial withdrawal of the counterclaim, State Farm contends that,

pursuant to the prior orders of the Court, it is entitled to--and

Defendants should be sanctioned for failing to provide--discovery

pertaining to 48 of the patients as to whom the counterclaim was

withdrawn.

B. Sanctions Motion and Ruling on Request for Admissions

State Farm filed a motion to compel and for sanctions,

arguing that the withdrawal of the counterclaim as to 48 patients

does not justify Defendants’ noncompliance with the Court’s prior

orders, which remain in effect (doc. no. 336). State Farm also

argued that the files pertaining to the 48 patients who are no

longer the subject of the counterclaim remain relevant,

speculating that Defendants may have withdrawn the counterclaim

as to those 48 patients because the discovery pertaining to them

contains unfavorable information. State Farm sought an order

Case 2:05-cv-05368-ER Document 397 Filed 03/10/08 Page 3 of 17
-4-

compelling the discovery and sought sanctions pursuant to Rule

37(d)(2)(B)--namely, that the counterclaim be dismissed.

At a February 4, 2008 hearing on the motion, the

parties discussed during oral argument a prior ruling of the

Court concerning a request for admissions in connection with the

patients that were no longer the subject of the counterclaim, and

its effect on the instant dispute. The ruling is significant

here because it undermines State Farm’s argument that it is

entitled to discovery in connection with those patients.

Specifically, State Farm served requests for admissions

concerning the patients as to whom the counterclaim was

withdrawn, and when Defendants objected to them as irrelevant,

filed a motion to compel. The Court denied the motion to compel,

discussing it in detail at the hearing. See Hrg. Tr., Oct. 24,

2007, at 29-43.

[S]imply because you can hypothesize that there may be

something there that is helpful doesn’t open the door

at this point in time. I think Rule 26 is instructive

in that regard . . . . It really has three levels of

discovery. It has those matters which are . . .

relevant to the claims [or] defenses, and those [you]

should be largely entitled [to] as a matter of right. 

Then you have matters which are relevant to the subject

matter of the lawsuit and that broadens the discovery,

and although they need not be admissible at trial, the

discovery [must] appear[ ] reasonably calculated to

lead to the discovery of admissible evidence. This

requires good cause, and good cause then puts us into a

balancing situation, including probative value versus

expense . . . . [H]ere this is really a request for

good cause discovery. I think under these

circumstances that test is not met. 

Case 2:05-cv-05368-ER Document 397 Filed 03/10/08 Page 4 of 17
The third level of discovery involves initial 2

disclosures under Rule 26(a)(1), which a party has a right to

receive without even making a specific request.

On February 19, 2008, after the Court denied the motion 3

without prejudice, counsel for State Farm informed the Court by

letter that he would like to renew the motion, and defense

counsel sent a letter in reply on February 21, 2008. The Court

will construe the February 19 letter as a motion for

reconsideration of the Court’s order denying without prejudice

the motion for sanctions. The letter sent by counsel for State

Farm did not request the Court to reconsider the motion to

compel, and the Court does not do so.

-5-

Id. at 43. The Rule 26 analysis underlying the ruling on the 2

request for admissions applies equally here: State Farm is not

entitled to discovery concerning the patients who are no longer

the subject of the counterclaim because it has not shown any

“good cause” for the discovery.

At the February 4 hearing, the Court suggested that the

same Rule 26 analysis applied to the motion to compel and for

sanctions. However, because counsel representing State Farm at

the hearing was not familiar with the Court’s prior ruling, the

Court denied the motion to compel and for sanctions without

prejudice, granting State Farm leave to familiarize itself with

the Court’s prior ruling and inform the Court whether it would

like to renew the motion for sanctions (doc. no. 390). State

Farm subsequently indicated that it would like to renew the

motion for sanctions.3

Case 2:05-cv-05368-ER Document 397 Filed 03/10/08 Page 5 of 17
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C. Merits of the Sanctions Motion

Rule 37(b) provides:

If a party . . . fails to obey an order to provide or

permit discovery . . . the court . . . may issue

further just orders . . . [and] the court must order

the disobedient party, the attorney advising that

party, or both to pay reasonable expenses, including

attorney’s fees, caused by the failure, unless the

failure was substantially justified or other

circumstances make an award of expenses unjust. 

Fed. R. Civ. P. 37(b)(2)(A), (C) (emphasis added).

The Court’s orders which Defendants are alleged to have

violated provide as follows:

1. “Defendants shall provide Plaintiffs the medical charts

for each of the 244 patients for which Defendants are

seeking payment in their counterclaim” (doc. no. 149).

2. “Defendants shall produce the balance of the medical

charts within 14 days” (doc. no. 287).

The first issue is whether Defendants violated these orders. The

second is, if Defendants violated the orders, whether the severe

sanction of dismissal is warranted. The third is, if dismissal

is not warranted, whether a monetary sanction should be imposed.

1. Failure to obey the Court’s orders

Defendants disobeyed the Court’s order requiring them

to provide “medical charts for each of the 244 patients for which

Defendants are seeking payment.” At the time Defendants were

required to produce the patients’ charts, they had not yet

withdrawn the counterclaim as to any of those patients. See

Case 2:05-cv-05368-ER Document 397 Filed 03/10/08 Page 6 of 17
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Stip., June 29, 2007 (withdrawing first set of patients from the

counterclaim); Order, Nov. 29, 2006, ¶ 6 (ordering production of

medical charts). Nonetheless, Defendants produced medical charts

for only 196 patients, in violation of the Court’s order.

State Farm filed another motion to compel, and the

Court ordered production of the remaining 48 medical charts:

“Defendants shall produce the balance of the medical charts

within 14 days.” Order, June 19, 2007, at 1. Defendants also

disobeyed this order. It is undisputed that Defendants did not

produce within 14 days the remaining charts for the 48 patients

as to whom the counterclaim was eventually withdrawn. Moreover,

Defendants did not withdraw the counterclaim as to those patients

until after they were ordered, for the second time, to produce

the medical charts for those patients. See Stip., June 29, 2007

(withdrawing first set of counterclaimants); Order, June 19,

2007, ¶ 6 (ordering production of medical charts).

2. Whether dismissal is a proper sanction

There is no question that Defendants are in violation

of the Court’s orders requiring them to produce discovery by a

certain date pertaining to the 48 patients who were no longer the

subject of the counterclaim. Nonetheless, because State Farm

seeks the severe sanction of dismissal, the Court must consider

the factors enumerated in Poulis v. State Farm Fire and Casualty

Case 2:05-cv-05368-ER Document 397 Filed 03/10/08 Page 7 of 17
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Co., 747 F.2d 863 (3d Cir. 1984):

(1) the extent of the party's personal responsibility;

(2) the prejudice to the adversary caused by the

failure to meet scheduling orders and respond to

discovery; (3) a history of dilatoriness; (4) whether

the conduct of the party or the attorney was willful or

in bad faith; (5) the effectiveness of sanctions other

than dismissal, which entails an analysis of

alternative sanctions; and (6) the meritoriousness of

the claim or defense.

Id. at 868. As discussed below, consideration of the factors

suggests that the severe sanction of dismissal is not warranted.

a. Defendants’ personal responsibility

There is no indication here that the failure to produce

the counterclaim documents was caused by the Defendant healthcare providers. State Farm agrees that it was counsel’s decision

(not the decision of Defendants themselves) not to produce the

discovery pertaining to the 48 patients as to whom the

counterclaim was eventually withdrawn.

b. Prejudice to State Farm caused by delay

Defendants’ counterclaim has been withdrawn to the

extent that it relates to the 48 patients whose medical charts

were not produced. Therefore, other than the cost associated

with the filing of its motions to compel and for sanctions, State

Farm cannot show prejudice to its claim on the merits, as the

charts not produced have been rendered irrelevant by the partial

Case 2:05-cv-05368-ER Document 397 Filed 03/10/08 Page 8 of 17
Although the existence of bad faith is a factor to be 4

weighed under Poulis when considering the sanction of dismissal,

the Court need not make a finding of bad faith to impose other

sanctions under Rule 37(b), such as monetary sanctions. See

Devaney v. Cont’l Am. Ins. Co., 989 F.2d 1154, 1162 (11th Cir.

-9-

withdrawal of the counterclaim.

c. History of dilatoriness

There is also no question that Defendants have a

history of dilatoriness, but no party in this case is innocent of

causing delay, whether it be by needlessly protracting discovery

disputes or filing unnecessary motions.

d. Willful or bad faith conduct

Defendants willfully violated this Court’s orders. The

fact that certain patients were withdrawn from the counterclaim

does not justify disobeying the prior orders of the Court, even

if the discovery required by those orders had been rendered

irrelevant. The proper course of action would have been to

request that the Court modify its prior orders due to changed

circumstances. Nonetheless, because the Court later ratified

Defendants’ Rule 26 relevance analysis in its ruling with regard

to requests for admissions pertaining to the patients as to whom

the counterclaim was withdrawn, it cannot be said with certainty

that Defendants failed to comply with the Court’s orders in bad

faith.4

Case 2:05-cv-05368-ER Document 397 Filed 03/10/08 Page 9 of 17
1993) (“[S]ubsection 37(b)(2) . . . demands no demonstration of

bad faith.”).

-10-

e. Effectiveness of alternate sanctions

The appropriate sanction in this case is not dismissal:

The most direct and therefore preferable sanction for

the pattern of attorney delay such as that which the

district court encountered in this case would be to

impose the excess costs caused by such conduct directly

upon the attorney, with an order that such costs are

not to be passed on to the client, directly or

indirectly. This would avoid compelling an innocent

party to bear the brunt of its counsel's dereliction.

Dismissal must be a sanction of last, not first,

resort.

Id. at 869. The circumstances here do not warrant the severe

sanction of dismissal. Defense counsel’s failure to comply with

the Court’s orders or to request that the Court modify its prior

orders can be effectively addressed with monetary sanctions.

f. Meritoriousness of the counterclaim

State Farm has not shown in its motion that the

counterclaim lacks merit.

Accordingly, upon consideration of the Poulis factors,

the motion for reconsideration will be denied in part as to the

request that the counterclaim be dismissed.

3. Whether monetary sanctions are warranted

The Court has a mandatory obligation in the event that

a party fails to obey a discovery order, in that it “must order”

Case 2:05-cv-05368-ER Document 397 Filed 03/10/08 Page 10 of 17
The amount of the sanctions and the timing of payment 5

will be decided after a hearing to be scheduled at a later date.

-11-

that party or its attorney or both to “pay reasonable expenses,

including attorney’s fees, caused by the failure, unless the

failure was substantially justified or other circumstances make

an award of expenses unjust.” Fed. R. Civ. P. 37(b)(2)(A), (C).

Here, monetary sanctions are warranted. Defendants

attempt to excuse their noncompliance with the Court’s orders

with the fact that the partial withdrawal of the counterclaim

rendered irrelevant the discovery required by those orders. 

Although this may be true, the proper course of action for

Defendants was to seek modification of the Court’s prior orders,

not simply to disobey them.

Accordingly, the motion for reconsideration will be

granted in part, and monetary sanctions will be imposed on

defense counsel. The motion will otherwise be denied. 5

II. MOTION FOR SANCTIONS: VERIFICATIONS

A. Background

State Farm has repeatedly requested that Defendants

properly verify their discovery responses. Initially, Defendants

had submitted responses verified only by Defendant Arnold Lincow,

D.O., instead of by all Defendants. Since then, Defendants have

failed--despite three motions to compel and two orders of the

Case 2:05-cv-05368-ER Document 397 Filed 03/10/08 Page 11 of 17
At the hearing on the instant motion, the Court 6

indicated that the verifications supplied by defense counsel were

inadequate and that it would, yet again, order defense counsel to

supply proper verifications. Nonetheless, the Court took the

motion under advisement to consider the propriety of sanctions.

-12-

Court--to provide proper verifications binding each Defendant.

Most recently, in its order of October 25, 2007, the

Court required each Defendant to “provide, by November 9, 2007, a

verification stating that to the best of his or her knowledge,

information, and belief, the answers provided are true and

correct” (doc. no. 353). Defendants supplied verifications

stating that “[Defense counsel] has submitted responses . . .

jointly through information and documents provided by the 7622

Medical Center, P.C. . . . To the best of my knowledge, the

information is true and correct.” Plf.’s Mot. to Compel and for

Sanctions (doc. no. 362), Exs. L-N. State Farm argues that the

language concerning “information” injects confusion and is in

violation of the Court’s Order, and seeks an order compelling

proper verifications and sanctions of $1,000.

B. Motion to Compel6

Defense counsel has repeatedly avoided the obligation

to submit binding verifications despite orders of this Court

requiring him to do so. At a hearing on a previous motion to

compel the verifications, the following exchange took place:

MR. TODD [defense counsel]: [S]o, the way I framed this

Case 2:05-cv-05368-ER Document 397 Filed 03/10/08 Page 12 of 17
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verification was that when that verification--when that

discovery response was filed, I represented

[Defendants], and that the information that was

provided I had the authority to provide, and that it

was true and correct to the best of their knowledge. 

Your Honor, that to my knowledge, binds them. I am

their counsel of record.

THE COURT: Yes, but why is there a need that--to add to

it? It seems that it injects a level of uncertainty. 

The rule [Federal Rule of Civil Procedure 33(b)(1)-

(b)(2)] provides that answers to interrogatories and

the verification for request of production of documents

should be signed by counsel and by the party. . . . 

[I]n every case there is going to be some discussion

between the two, and the lawyer is going to draft the

answers. . . . [W]hy can’t the verification simply say

that to the best of the knowledge, information and

belief the answers are true and correct? Isn’t that

the whole point?

MR. TODD: Your Honor, I honestly believed that was what

I was doing . . . . I will go back and have them sign

it with that wording.

Hrg. Tr., Oct. 24, 2007, at 27-28.

Despite his promise to change the verifications to

accord with the Court’s order, defense counsel again retained a

portion of the language that the Court asked him to remove. 

Counsel removed the paragraph stating that Defendants were

relying on the information of counsel, but retained the language

stating that Defendants were participating in joint discovery

through counsel. In addition, the removed paragraph has

inexplicably been replaced by another sentence concerning joint

discovery. Compare Plf.’s Mot. to Compel and for Sanctions (doc.

no. 362), Ex. E, with id., Ex. L. As made clear by the prior

orders of this Court, the fact that Defendants are engaging in

Case 2:05-cv-05368-ER Document 397 Filed 03/10/08 Page 13 of 17
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joint discovery does not excuse them from the requirement of Rule

33(b)(1)(3) that each Defendant must verify the interrogatories,

and the mention of joint discovery in the verifications thus only

creates confusion. Accordingly, the motion to compel proper

verifications will be granted.

C. Motion for Sanctions

If the Court finds that its orders were disobeyed,

sanctions must be imposed upon the “disobedient party, the

attorney advising that party, or both” in the amount of “the

reasonable expenses, including attorney’s fees, caused by the

failure, unless the failure was substantially justified or other

circumstances make an award of expenses unjust.” Fed. R. Civ. P.

37(b)(2)(A), (C). 

Defense counsel seeks to excuse his actions by arguing

that his repeated submission of improper verifications was a good

faith attempt to comply with the Court’s orders. A finding of

bad faith, however, is not a prerequisite for sanctions under

Rule 37(b). See Devaney, 989 F.2d 1154, 1162. Rather, the Court

“must” impose sanctions unless “circumstances make an award of

expenses unjust.” No such circumstances exist here.

Accordingly, because defense counsel has repeatedly

disobeyed the orders of this Court concerning the simple task of

verification despite clear instructions, and without

Case 2:05-cv-05368-ER Document 397 Filed 03/10/08 Page 14 of 17
The amount of the sanctions and the timing of payment 7

will be decided after a hearing to be scheduled at a later date.

-15-

justification, sanctions will be imposed upon defense counsel.7

III. CONCLUSION

The motion for reconsideration will be granted in part

and denied in part. The motion to compel verifications and for

sanctions (doc. no. 362) will be granted. Monetary sanctions

will be imposed upon defense counsel in an amount to be

determined after a hearing to be scheduled at a later date. An

appropriate order follows.

Case 2:05-cv-05368-ER Document 397 Filed 03/10/08 Page 15 of 17
IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF PENNSYLVANIA

STATE FARM MUTUAL AUTOMOBILE : CIVIL ACTION

INSURANCE CO. et al., : NO. 05-5368

 :

Plaintiffs, :

:

v. :

:

:

ARNOLD LINCOW, D.O. et al., :

:

Defendants. :

O R D E R

AND NOW, this 10th day of March, 2008, for the reasons

stated in the accompanying Memorandum, it is hereby ORDERED that,

upon consideration of the February 19, 2008 letter from counsel

for Plaintiffs, which the Court will construe as a motion for

reconsideration, the motion is GRANTED in part and DENIED in

part. The motion is granted to the extent that sanctions are

imposed against defense counsel Joel Todd, Esq. The amount of

the sanctions and the timing of payment will be decided after a

hearing to be scheduled at a later date. The motion is otherwise

denied.

IT IS FURTHER ORDERED that Plaintiffs’ motion to compel

verifications and for sanctions (doc. no. 362) is GRANTED. 

Defendants shall supply proper verifications in accordance with

this Memorandum and Order by March 24, 2008. Sanctions are

imposed against defense counsel Joel Todd, Esq. The amount of

Case 2:05-cv-05368-ER Document 397 Filed 03/10/08 Page 16 of 17
the sanctions and the timing of payment will be decided after a

hearing to be scheduled at a later date.

AND IT IS SO ORDERED.

S/Eduardo C. Robreno 

EDUARDO C. ROBRENO, J.

Case 2:05-cv-05368-ER Document 397 Filed 03/10/08 Page 17 of 17